Imagine receiving repeated phone calls and text messages from a loan company demanding money for debts that you can’t cover.

The Government is keen to impose measures to prevent situations such as this arising, and from April the Financial Conduct Authority took over as industry regulator, and will decide on capping the costs of loans.

But these changes will probably not be introduced until next year – giving plenty of vulnerable people the opportunity to take on loans with terrifying interest rates that they cannot possibly pay off.

This infographic shows the perils of not paying off a payday loan as quickly as possible, and the spiral of interest payments, which can soon grow and take over a person’s life.

One of the most effective ways of dealing with multiple debts is to consolidate them into one solid amount per month.

Another is to speak to the company, to whom you owe money, as soon as possible, to try to find a solution or arrangement to pay it back at a slower rate.

The Money Advice Service can suggest a range of alternative measures before taking on a payday loan. But the main advice is this: think carefully before clicking the ‘accept’ button.

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